House prices continue to falter but lending offers hope

21st February 2012

House prices in the UK are still failing to return to the levels seen at the end of the housing boom in 2007, a new report from the Halifax has revealed.

The research shows that since prices peaked five years ago, only two local authority districts in Britain have witnessed an improvement - namely Rochford in Essex and South Lakeland, Cumbria.

Elsewhere, all other areas have experienced a negative change, reflecting the continued difficulties evident in the housing market. The nine worst affected districts are all in Northern Ireland, with Craigavon suffering a fall in average prices of 53 per cent over a four year period.

With markets clearly still struggling to recover, many investors could well be tempted to purchase property in locations that have the potential to see prices rise in the future - for example media city apartments in Manchester - as well as in other major areas throughout the UK.

Whilst it remains difficult to predict the possibility of an imminent recovery, the Council of Mortgage Lenders (CML) reported lending in January to be ten per cent stronger than a year ago - a possible indication that buyers are returning to the market to take advantage of the continued lull in prices.

Given the new developments in the mortgage market, the CML's chief economist, Bob Pannell, said that "this can only be good news for the housing market further down the track".

Clearly, given the ongoing economic troubles, the housing market is yet to see a clear and substantial recovery. However, the CML's report seems to offer hope, and the research from the Halifax could interest buyers looking to secure property before any upward trend resumes throughout the UK.